ACCA Guidelines – Competition Bureau Draft Guidance Regarding Pricing Practices

As discussed in our bulletins of November 5, 2025, December 9, 2025 and December 16, 2025 the Competition Bureau released its proposed new Anti-Competitive Conduct and Agreements Enforcement Guidelines (the "Draft ACCA Guidelines") for consultation on October 31, 2025. As previewed, we are releasing a series of follow-up insights of what Canadian businesses need to know about the implications of the Draft ACCA Guidelines, both in terms of how they signal new enforcement approaches by the Bureau and how they show the Bureau interpreting the relevant Competition Act (the "Act") provisions covered by these guidelines (the "ACCA Provisions").

This bulletin discusses the approach outlined in the Draft ACCA Guidelines to assessing various pricing practices under the ACCA Provisions: (i) price maintenance, (ii) below-cost pricing and (iii) excessive and unfair pricing.

Price Maintenance

The Draft ACCA Guidelines provide updated guidance on how the Bureau will analyze and act on the anticompetitive effects that may occur from price maintenance conduct. By way of background, the Competition Act contains a specific section at section 76 that addresses "price maintenance" with the Bureau's existing guidance on this provision being described in its Price Maintenance Enforcement Guidelines that were published on September 15, 2014. The Draft ACCA Guidelines seek to integrate the Bureau's price maintenance guidance into broader and more comprehensive guidelines. As noted in "Table 1" of the Draft ACCA Guidelines, the Bureau will consider using the abuse of dominance provisions (sections 78 and 79), the anti-competitive agreement provisions (section 90.1) and the specific price maintenance provision (section 76), as appropriate, to address price maintenance conduct.

In the Bureau's view, price maintenance occurs when a supplier influences, directly or indirectly, the prices at which its products are resold or advertised by retailers or other distributors in a manner specified in the Act. In a footnote, the Bureau notes that this would not include a situation where a supplier merely increases its own prices to its customers.

The most direct form of price maintenance is when a supplier sets a minimum price that retailers have to charge when reselling. However, the Bureau notes that suppliers can also engage in price maintenance in other ways. The Draft ACCA Guidelines indicate that common forms, some not customarily thought of as constituting price maintenance, include:

1. Setting the profit margin for retailers on the supplier's products.
2. Imposing rules about the retail price of their products as compared to the prices the retailer charges for other suppliers' products. For example, the supplier may require that the price of their product cannot be more than or must match or undercut the price of its competitors' products. This would be a form of a most-favoured nations (MFN) clause.
3. Requiring retailers to earn a profit margin on the supplier's product compared to competing products.
4. Fixing the maximum discount a retailer can give or that retailers can offer.
5. Setting a maximum price for a product, if that policy means customers actually pay higher prices than they otherwise would.
6. Implementing a Minimum Advertised Pricing (MAP) policy that sets the minimum price at which a retailer may advertise the supplier's product to a customer.
7. Refusing to supply a product to a retailer because of its low pricing policy.

When can Price Maintenance Conduct Harm Competition?

The Bureau notes that price maintenance is not always anti-competitive. For example, price-maintenance can increase demand for a product by eliminating inefficiency and it can also stimulate competition and promote the supply of appropriate services. We note that price maintenance is a common business practice among manufacturers which is often used for a variety of legitimate purposes such as protecting brand integrity, ensuring retailers provide sufficient sales support and enhancing intra-brand competition.

While price maintenance can be benign or pro-competitive in certain circumstances, the Draft ACCA Guidelines identify several categories of anticompetitive effects that may result from price maintenance:

• Facilitating coordination between suppliers: Price maintenance policies can increase price transparency in a market, making it easier for suppliers to detect if another supplier is deviating from a coordinated outcome. This can be of particular concern when price maintenance is widespread in a market or functions by referencing competing products' prices. Price maintenance can also facilitate supplier coordination by making the coordinated outcome more stable due to higher profits.
• Excluding rival suppliers: Price maintenance that guarantees retailers higher margins can reduce their incentive to carry the products of other suppliers. This can exclude rival suppliers since they cannot access those sales channels even if there is no explicit exclusivity requirement. Rival suppliers may be forced to either offer retailers higher profit margins or lose access to distribution channels.
• Reducing price competition among retailers: A major retailer may pressure a supplier to create a price maintenance policy to directly limit price competition among retailers. This can soften competition at the retail level and allow retailers to exercise more market power.
• Facilitating coordination among retailers: A supplier setting even a maximum retail price above the current price level, the Draft ACCA Guidelines argue, may provide a "focal point" that improves coordination among retailers. This may mean the retailers adopt this higher price.
• Excluding discount or more efficient retailers: Price maintenance can exclude discount or more efficient retailers, preserving the market power of established retailers. For example, a minimum price can give retailers less incentive to innovate and invest in being more efficient. Since they cannot charge a lower price, they cannot gain market share by passing these efficiencies along to customers.

The Draft ACCA Guidelines lower the market share threshold that may indicate sufficient market power from 35% to 30% for price maintenance investigations. Additionally, while the old (and still currently in force) guidelines were silent on maximum resale pricing, the new draft ACCA Enforcement Guidelines, somewhat controversially, take the position that setting a maximum resale price can engage the price maintenance provision if it results in customers actually charging higher prices than they would have otherwise. The Draft ACCA Guidelines also provide more detailed guidance on what constitutes a "low pricing policy," clarifying that such a policy , again not without controversy, need not apply to the specific product that is the subject of a refusal to supply or discrimination.

Below-Cost Pricing

The Draft ACCA Guidelines indicate that below-cost pricing is a concern when engaged in by dominant firms.

The Draft ACCA Guidelines suggest that below cost pricing may raise issues where a dominant firm sells products at prices below an appropriate measure of its own costs in a manner that is not plausibly explained by pro-competitive or efficiency-enhancing reasons. The Draft ACCA Guidelines recognize that this conduct can take multiple forms, including sustained loss-leadering, targeted pricing aimed at disciplining specific competitors or deterring entry, or pricing strategies deployed at key competitive choke points. While below-cost pricing is not inherently unlawful, it may constitute an anti-competitive act or exclusionary conduct when used strategically by a firm with market power.

The Draft ACCA Guidelines state that pricing below a firm's average avoidable cost gives rise to a presumption of anti-competitive purpose, subject to rebuttal by credible evidence of pro-competitive explanations, such as time-limited promotions, disposal of surplus or perishable goods or financial distress. Pricing between average avoidable cost and average total cost will generally raise concerns only where there is additional clear evidence of anti-competitive purpose, while pricing above average total cost will not, on its own, raise concerns under the abuse of dominance provisions.

How Below-Cost Pricing Can Harm Competition?

The Draft ACCA Guidelines indicate that that below-cost pricing can harm competition in the following ways:

• Below-cost pricing harms competition when it causes competitors to exit a market or deters them from entering or expanding, thereby allowing the firm to exercise more market power than it otherwise could.
• Below-cost pricing involves a firm acting in a manner that is not profitable in the short term, since it loses money on sales. The fact that the firm was willing to lose money can suggest that it expected its pricing to harm the competitive process and thereby allow it to recoup its losses. The Bureau will also consider factors such as:
• • Whether the pricing has caused competitors to exit a market.
  • Whether the pricing has deterred competitors from entering a market or expanding in it.
  • Whether it is plausible that the firm could recoup its losses, including if there are barriers to entry or expansion that would prevent new competition from emerging if the firm later raised prices.

Recoupment can occur in any manner that renders the below-cost pricing profitable as a result of harm to competition.

• The Bureau may also consider whether the pricing harms the competitive process in other ways. For example, the Bureau may consider whether the pricing:
• • Reduces the value of competitors, making them easier to acquire.
  • Constitutes disciplinary conduct.
  • Otherwise facilitates coordination, such as by excluding competitors that could disrupt coordinated outcomes.

Where below-cost pricing harms competition, the Bureau will consider it to be conduct that may harm competition within the meaning of paragraph 79(1)(b) of the abuse of dominance provisions.

The most significant updates in the Draft ACCA Guidelines from the existing Abuse of Dominance Enforcement Guidelines are those that reflect recent amendments to the abuse of dominance provisions, which now only require finding either that conduct by a dominant person is leading to substantial competitor harm or that a dominant person has engaged in a practice of anti-competitive acts. Therefore, the Bureau notes that it may choose to seek an order under the abuse of dominance provisions if a firm engages in anti-competitive act by pricing below-cost and/or if a dominant firm's below-cost pricing is having the effect of substantially harming competition.

Excessive and Unfair Pricing

The 2024 amendments to the Act added the concept of excessive and unfair pricing to the abuse of dominance provisions. Paragraph 78(1)(k) now lists "directly or indirectly imposing excessive and unfair selling prices" as an example of conduct that can be an anti-competitive act.

Pursuant to the Draft ACCA Guidelines, the Bureau indicates that it may act on excessive and unfair prices where such conduct meets the test under the abuse of dominance provisions. However, the Draft ACCA Guidelines indicate that excessive and unfair pricing is likely to raise issues only if it is used to engage in other types of anti-competitive conduct or agreements.

The Draft ACCA Guidelines provide that simply charging high prices to buyers is unlikely to raise issues under the abuse of dominance or other ACCA Provisions, no matter how high those prices are. For example, if a firm charges high prices for a limited product or service that is in high demand, that does not usually raise issues. The same is true of charging some buyers higher prices than others.

However, in some cases, high prices could be the result of other anti-competitive conduct or agreements that can be pursued under the Act. In those cases, the Bureau would usually act on the anti-competitive conduct or agreement that allows the firm to charge the high price, not the high price itself. The Bureau will investigate excessive and unfair pricing only when it forms part of broader anti-competitive conduct that harms the competitive process. Examples of this could include:

• An excessive and unfair price is used as a constructive refusal to deal.
• Purchasers are forced to bundle products as a result of a supplier charging excessive prices for separate purchases.
• Requiring buyers to pay excessive fees to end a supply contract and switch to a competitor.
• An excessive and unfair price is used to engage in margin squeeze strategies.

Key Takeaways

Given the evolving enforcement approach outlined in the Draft ACCA Guidelines, businesses should proactively review their pricing practices and policies to ensure compliance with the Bureau's updated framework. The following practical considerations provide guidance on steps businesses can take to mitigate competition law risks associated with the pricing practices discussed above.

• Document legitimate business justifications for pricing strategies, including efficiency gains, cost recovery, promotional objectives and competitive responses.
• Review reseller policies, promotional allowances and information-sharing practices for potential to facilitate coordination among suppliers or retailers, with particular attention to minimizing price transparency or focal points that could facilitate coordination. Limit the scope, duration and visibility of pricing commitments that could serve as coordination mechanisms.
• Ensure advertised or resale price policies include clear and prominent disclaimer language (e.g., "retailers may sell for less") and avoid conditioning benefits on adherence to specified prices or margins.
• Before implementing significant price cuts or aggressive promotions, assess whether pricing falls below average avoidable costs and document pro-competitive justifications such as clearing inventory, time-limited promotions or platform strategies
• High prices alone are not unlawful; however, businesses should avoid tying high pricing to other conduct that harms competition.

While the Draft ACCA Guidelines are currently published only for public consultation, they provide the most up-to-date information on the Bureau's current enforcement policy and approach to analyzing pricing practices under the ACCA Provisions. If you have any questions regarding the ACCA Guidelines, please contact McMillan's Competition and Antitrust Group.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2025